RJ 260 Intercompany transactions: when you eliminate profit within the group
If the parent sells goods to its subsidiary at a profit, that profit has not yet been earned by the group while the goods remain within the group. RJ 260 determines how much you eliminate, and in which annual accounts.
The short answer
In consolidated accounts you eliminate profit on deliveries within the group in full, until the asset has been sold to a third party or depreciated. In separate accounts it depends on how the participating interest is measured: at net asset value you recognise only the part that belongs to third parties, at cost or current value you usually recognise profit on a sale to the participating interest immediately.
Updated 30 October 2026
Key facts
| Guideline | RJ 260 (revised 2023), effective for financial years from 1 January 2024; unchanged for 2025, 2026 and 2027 |
| Micro and small | RJk B3.4: cost recharges are usually realised immediately; if the delivery is capitalised by the recipient, RJ 260 applies |
| Law | art. 2:384(2) DCC (realised profit only), art. 2:389(10) DCC (state the difference between separate and consolidated) |
| Directions | Downstream (parent to participating interest), upstream (participating interest to parent) and sidestream (between participating interests) |
What an intercompany transaction is
An intercompany transaction is a transaction between group companies, between a legal entity and a non-consolidated participating interest, or between such participating interests, even if it falls outside the ordinary course of business (RJ 260.0 and 260.104). An interest that is not a participating interest but an investment falls outside it: you simply recognise profit on that (RJ 260.103).
Services between group companies, such as a management fee, are usually realised immediately in the separate accounts, because the recipient books them as costs. In the consolidated accounts the revenue offsets the costs. If the recipient capitalises the service, for example as development costs, you treat it as a delivery of an asset (RJ 260.103; RJk B3.403).
In applying the accounting policies, prudence is exercised. Profits are recognised only to the extent that they have been realised at the balance sheet date.
Separate accounts: it depends on how the participating interest is measured
At net asset value RJ 260 sees the participating interest as a collection of assets and liabilities in which you hold an interest (RJ 260.201). Of the profit on a transfer you recognise only the part that ends up with others; the part that stays within the group through your interest you eliminate (RJ 260.202).
- Downstream. You recognise profit in proportion to the interest of third parties in the purchasing participating interest (RJ 260.208).
- Upstream. Your share in the profit the participating interest makes on the sale to you, you recognise only when you resell or depreciate the asset (RJ 260.209).
- Sidestream. You limit your share in the profit of the selling participating interest to the decrease in your relative interest in the asset sold (RJ 260.210).
- Realisation. The eliminated part is released on resale to a third party, through depreciation for fixed assets, or when you sell the purchasing participating interest (RJ 260.203 and 260.205). If the participating interest stands at zero, you keep the elimination as a deferred item (RJ 260.204).
At cost or current value the participating interest is one indivisible asset. Profit on a sale to it you recognise immediately and in full, unless essentially nothing has been realised, for example because the buyer remains in debt for the price and cannot pay it itself (RJ 260.301–302). On a delivery from the participating interest to you, you recognise no result (RJ 260.303).
The participating interest itself eliminates nothing in its own annual accounts: it books the goods purchased at its purchase price and the goods sold with full profit (RJ 260.501–502).
Consolidated: everything out until a third party buys
In the consolidated annual accounts the group is one enterprise. You eliminate profit on deliveries between group companies in full from the measurement of the asset and from the group result, until the asset has left the group or been depreciated. Turnover and cost of sales of the internal delivery drop out in full (RJ 260.401). If it concerns an upstream or sidestream sale by a subsidiary with a minority shareholder, you allocate the appropriate part of the elimination to the share of third parties.
As a result equity and result can differ between the separate and the consolidated accounts (RJ 260.402). You state that difference in the notes to the separate annual accounts (art. 2:389(10) DCC).
Case: a wholesaler supplies its retail chain
Wholesaler Rietveld BV owns 60% of Rietveld Retail BV; 40% is held by a franchise partner. Rietveld measures Retail at net asset value and consolidates it. In December 2026 Rietveld sells goods with a purchase price of € 80.000 to Retail for € 120.000. On 31 December Retail has sold 75% of them to customers and 25% is still in inventory, at € 30.000.
| Amount | Explanation | |
|---|---|---|
| Rietveld's profit on the delivery | € 40.000 | € 120.000 − € 80.000 |
| Unrealised part in Retail's inventory | € 10.000 | 25% of € 40.000 |
| Separate: to be eliminated | € 6.000 | The own interest of 60% in that part |
| Separate: profit in 2026 | € 34.000 | € 40.000 − € 6.000 |
| Consolidated: to be eliminated | € 10.000 | In full; downstream, so not allocated to the share of third parties |
| Consolidated: profit from this delivery in 2026 | € 30.000 | € 40.000 − € 10.000 |
In the consolidated figures the revenue of € 120.000 and the related cost of sales drop out, and inventory falls by € 10.000. In the separate annual accounts Rietveld deducts the € 6.000 from turnover and recognises it as a deferred liability item or as a reduction of the participating interest (RJ 260.206–207). The difference of € 4.000 between separate and consolidated equity it mentions in the notes. If Retail sells the last goods in 2027, the elimination is released in both sets of accounts.
Variants. If Rietveld measured Retail at cost, it would recognise the full € 40.000 in its separate accounts. Had the delivery gone the other way, from Retail to Rietveld, Rietveld would defer its 60% share in Retail's profit on the goods it still holds until it resells them. As a small group without consolidated annual accounts, Rietveld applies only the separate rules: the goods are taken into inventory by Retail, so RJ 260 applies via RJk B3.403. A micro-entity processes it the same way, without notes.
By size class
| Class | What applies |
|---|---|
| Micro | The same treatment via the RJk measurement rules (RJk M1.301); no notes |
| Small (RJk) | RJk B3.4: recharged costs are usually realised immediately; for capitalised deliveries RJ 260. You state the accounting policy for intercompany results in the notes (art. 2:384(5) DCC). Transactions with related parties outside market conditions need not be stated (art. 2:396(5) DCC) |
| Medium-sized | RJ 260 in full. Transactions with related parties outside normal market conditions are stated only by the NV, limited to major shareholders and directors and supervisory board members (art. 2:397(6) DCC) |
| Large | RJ 260 in full, plus the statement of non-arm's-length transactions with related parties (art. 2:381(3) DCC; RJ 330) |
What changes per financial year
The revised RJ 260 has applied since financial years from 1 January 2024. The RJ then made the chapter clearer and clarified it; in the examples, income tax on the eliminated profit is disregarded, while under RJ 272 it can lead to deferred tax (RJ-Uiting 2023-8). For 2025, 2026 and 2027 RJ 260 is the same. In RJk B3, from financial year 2025 the definition of an intercompany transaction was aligned with the RJ (RJ-Uiting 2024-13).
Common mistakes
- In separate accounts at net asset value, recognising the full profit on a sale to a subsidiary that still holds the goods.
- In consolidated accounts, eliminating only your own share instead of everything.
- Selling a property at a profit to a subsidiary and not letting the elimination follow its depreciation.
- Booking a profitable sale to a participating interest at cost while the buyer can never pay the price itself.
- Not explaining the difference between separate and consolidated equity.
How it works in Jaarrekening.io
The consolidation module eliminates intercompany receivables and payables and offsets intercompany turnover against the costs. You calculate the amount of unrealised profit per group relationship yourself and enter it; the app processes it in inventory or fixed assets and in the group result. The part of an elimination that belongs to a minority shareholder you adjust manually.
Sources
- Art. 2:384 DCC: prudence and the realisation principle (wetten.overheid.nl)
- Art. 2:389 DCC, paragraph 10: differences between separate and consolidated
- RJ-Uiting 2023-8: revised RJ 260 final (rjnet.nl)
- RJ-Uiting 2024-13: definition of intercompany transaction in RJk B3 (rjnet.nl)
- Guidelines for annual reporting (rjnet.nl)
Frequently asked questions
Must I eliminate the management fee between holding and operating company?
Not in the separate annual accounts: the fee is a service that the operating company books as costs, so the revenue is realised (RJ 260.103; RJk B3.403). In the consolidated annual accounts revenue and costs do offset each other, because the group has no turnover on services to itself.
When is eliminated intercompany profit realised after all?
When the asset leaves the group through a sale to a third party, as the buyer depreciates a fixed asset, or when you sell the purchasing participating interest (RJ 260.203 and 260.205). At that moment the elimination is released in favour of the result.
Why does equity differ between the separate and the consolidated annual accounts?
Among other things because in the separate accounts, for a participating interest at net asset value, you eliminate only your own share of the unrealised profit, and in the consolidated accounts all of it. You state that difference, and other differences between the two sets of accounts, in the notes to the separate annual accounts (art. 2:389(10) DCC).
My holding sells a property at a profit to the operating company. What now?
If the holding measures the operating company at net asset value, it eliminates the profit in its separate accounts in proportion to its interest, so in full at 100%. That elimination is released as the operating company depreciates the property, and the rest on a sale to a third party. In the consolidated accounts the property stays at its original carrying amount (RJ 260.203, 260.208 and 260.401).
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